The Association of Consumer Support Organisations (ACSO) criticised car insurers for making considerable additional profits during the COVID-19 pandemic.
A study commissioned by the ACSO, titled Profiting from Pandemic Premiums, concluded that motor insurers have benefited from a windfall of £118 per policy due to the reduced number of claims during the pandemic. Data from the ABI showed that the number of claims settled fell by nearly 20% last year. Meanwhile, motor premiums decreased by just £25 in the last 18 months.
“The insurance industry’s own statistics underline what a bumper year 2020 was for car insurers,” said Matthew Maxwell Scott, executive director of ACSO. “Mileage fell by 25%, accidents fell by 23% and thefts by 21%, yet premiums fell by just 9%. This means the pandemic enabled the insurers to boost their profits from underwriting motor insurance by £3.3 billion, but the hard-pressed motorist has barely benefitted.”
Thus, insurers must immediately slash motor premiums prices, Maxwell Scott said.
“If insurers are keen to trumpet the £25 drop in premiums during the past 18 months, it’s worth asking why they have kept quiet about the further £93 per policy in unexpected profits, for which they have had to do nothing,” he said.
ACSO also urged the motor insurance industry to be more transparent about pricing, especially since motor cover is a compulsory and essential purchase.
Due to wildly varying average prices reported by the ABI and price comparison websites, ACSO believes that the only way consumers can get a fair deal is if insurers submit their numbers to an official body for peer review.
“We believe that, for a compulsory product like car insurance, it is not okay for insurers to mark their own homework,” Maxwell Scott said. “In the name of transparency and fairness to consumers we’ve written to the Business Secretary to request that he commissions the Official for National Statistics to review industry pricing data.”
This article is care of Insurancebusinessmag.com and can be found here
